President of Russia Vladimir Putin: Mr Miller, good afternoon.
We meet on a regular basis, work together, but I would like to hear your opinion on how the company performed last year, which was a difficult year for the energy industry in general. This would be my first question.
The second one is how we are coping with the winter peak.
The third issue is related to connecting households and facilities in Russia to gas. This issue is probably the most important one, so let us start with it. I know that the company has big plans there. You have always been focused on the issue of connecting users to the gas grid, but at some point the pace slowed down.
People have many questions about that. Of course, they want to know the plans for connecting them to the grid. Gazprom is engaged in it together with the Russian regions. We all know that the plans for the development of the pipe infrastructure should include connecting the end user.
Let us discuss that.
Gazprom CEO Alexei Miller: Mr President,
Your instructions regarding signing medium-term five-year programmes on connecting users in the regions to the gas grid have been fulfilled: all 67 programmes have been signed, their objectives and tasks through 2025 have been outlined.
Gazprom is almost tripling the financing. The total volume of investment by Gazprom over this period will reach 526.1 billion rubles. We plan to build 24,400 kilometres of gas pipelines and connect 3,632 cities and villages to the grid. By the end of 2025, 35 regions in Russia will have a complete gas network. It will amount to 90.1 percent of what is technically possible to do in the country regarding connecting users to the grid.
Also, Mr President, in accordance with your instructions, we have set the goals for 2030. By 2030, the technically possible connection to the gas grid in Russia will be completed by 100 percent. We also signed plans and schedules with the regions for the synchronisation of works for 2021. Starting January 1, Gazprom and the regions are gathering a new speed, a new pace of work.
So, there are two priorities for us at the moment: the social focus of the programme to provide gas supply and the further connection of rural areas to the gas grid.
Vladimir Putin: Good.
Mr Miller, what about the tariff policy and pricing? I am speaking both about domestic tariffs and prices on international markets that you use to sell gas to our foreign customers.
Alexei Miller: Mr President, as for 2020, you noted that last year was a difficult year for the global energy industry. The first half of 2020 was especially hard, when both the demand and prices for Russian gas on foreign markets fell. However, in the second half of the year, the markets stabilised, and today we see that the volumes in the second half look good and what’s most important, the prices started to recover.
In October 2020, we even had record deliveries to non-CIS countries, an all-time high. We delivered 17.4 billion cubic metres of gas and it definitely shows that demand for Russian gas on European markets is stable and growing.
The production volume – some 452 billion cubic metres – allows us to fully meet the demand both on the domestic and foreign markets. At the same time, the company’s production capacity exceeds the volume of production by almost 100 billion cubic metres of gas.
As for domestic tariff regulation, the decision is taken by the Federal Anti-Monopoly Service and the current level allows us to keep the social focus on the domestic market while providing the gas processing and gas conversion industries with the necessary commodities.
As you know, in 2020 a great deal was done so that Russia would soon have a large new gas refining and natural gas conversion facilities. First of all, of course, this includes our development of the Yamal gas production centre and the Northern gas transmission corridor, as well as the two compressor stations and more than 850 km of the linear part that have been built. This will make it possible to supply gas to one of the world’s largest refining and gas chemical complexes near Ust-Luga. The project is being implemented on schedule.
As for the Amur Gas Processing Plant, it is 70 percent ready. This year, the first start-up complex and two production trains will be launched. The output of this plant will be supplied to the Amur gas chemical complex.
There is no doubt that soon we will take an important step forward in the area of gas refining and gas conversion; the most advanced technological production will appear in this sector. Today our goal is to build up capacities both in the west and the east in order to look towards both the European and Asian markets.
Of course, speaking about the results of 2020, we should note that December marked one year since Power of Siberia began to supply gas. Mr President, I would like to report that the volume of gas supplied to the Chinese market is above the level planned and higher than the annual amount agreed under the contract; on some days during the second half of 2020, our daily deliveries exceeded our daily contractual obligations by 25 percent. Thus we can see that the Chinese market is developing dynamically. Today the demand exceeds even the volumes stipulated in the contract, which is designed for 30 years.
Vladimir Putin: What about work on the other route?
Alexei Miller: As for the Power of Siberia 2 pipeline, Mr President, we have started environmental survey, which are being carried out in Russia, in line with your instructions.
We also hold direct videoconferences with our Chinese and Mongolian partners. During this period, a feasibility study for the Mongolian route is being developed and a special-purpose company is being set up to build a pipeline across Mongolia.
The feasibility study will be ready right in the first quarter of 2021. But even now, according to the preliminary feasibility analysis, we can say that it will be a technically feasible and cost-effective project.
Vladimir Putin: Good. Thank you.
Alexei Miller: Thank you, Mr President.